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Construction job measure to be down 8%.

Construction job measure to be down 8%

Led by a recovery in housing, total construction contracting should exceed the weak first half-year value by approximately 10 percent, reports the second update of Dodge/Sweet's 1991 Construction Outlook.

The Construction Information Group of McGraw-Hill, Inc. forecasts that construction contracting will total $226.5 billion for the year, down 8 percent from 1990.

After six consecutive quarters of decline, which eroded the value of newly started construction by nearly 25 percent, "1991's second quarter brought a small but welcome gain," said George A. Christie, vice president and chief economist for F. W. Dodge. "Its importance was in the change of direction, with the promise of further improvement ahead."

Although housing and commercial building are still being buffeted, by mid-year, the rate of housing starts improved by 15 percent. "And though 1991's housing unit total is smaller than hoped, one-family housing will be the dynamic part of the construction sector for now as starts advance to an average rate of 900,000 units in the second half of 1991. Not surprisingly, the overdeveloped commercial building market was still the construction industry's hardship case," Christie added.

Publicly sponsored construction, on the other hand, remained the most stable sector, largely unaffected by either recession or banking crisis. "Public construction should continue its solid hold through 1991, with greater gains expected on the Federal side than the State due to the major fiscal problems many states face," added Christie.

Regionally, the Southeast and West, with respective declines of 9 and 12 percent, will experience the 1991 downturn most severely. The Northeast and North Central will fare slightly better than the national average, each expected to slide 7 percent, while the South Central region will remain unchanged for the year.

For 1991 as a whole, total construction contract value will finish in the negative column for the second year, despite the outlook for improvement in the quarters ahead. Christie added, "it will also leave the worst of the 1990-91 construction recession behind. Overall, the second half of 1991 will continue the recovery, but the improvement will be confined to housing."

For more information, or a copy of the Second Update to the 1991 Dodge/Sweet's Construction Outlook contact: Luciana Borbely or Mark Danes, McGraw-Hill, Inc., (212)512-3851; fax (212)512-2703.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:construction contracting
Publication:Real Estate Weekly
Article Type:Brief Article
Date:Aug 21, 1991
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